Dubai: After a strong finish to 2023, Apple's iPhone sales have declined significantly in the first half of 2024, leading to a revenue drop for the tech giant.
Rising Chinese competition eats into market share
While Apple has historically dominated the smartphone market with its iconic iPhone, competition from Chinese brands like Xiaomi, Vivo, and Oppo is taking its toll. These brands offer high-spec phones at lower prices, appealing to a broader range of consumers. This aggressive pricing strategy has impacted iPhone sales, causing a decline in revenue and shipments.
Shipments and revenue decline in Q1 and Q2 2024
According to IDC Quarterly Mobile Phone Tracker, the iPhone maker shipped 50.1 million of its smartphones in Q1 2024, five million less than in the same period last year, translating to a 10% drop in sales revenue to $45.9 billion.
The second quarter saw a slight rise in shipments (1.5%), but revenue still dipped by $400 million to $39.2 billion, according to Apple's official data.
Overall revenue drop in the First Half of 2024
These two consecutive quarters of decline resulted in a total revenue drop of $2.7 billion for Apple's iPhone sales in the first half of 2024.
Sales figures show a decrease from $88 billion in the first half of 2023 to $85.2 billion this year.
Market share decline reflects a broader trend
Apple's decline isn't isolated. The IDC data reveals a decrease in iPhone unit shipments as a share of the global smartphone market. Apple's market share dropped from 16% in the second quarter of 2023 to 15.8% in the same period this year. Even Apple's biggest competitor, Samsung, experienced a market share decline, going from 20% in Q2 2023 to 18.9% in Q2 2024.
iPhone revenue share of Apple Declines
With the recent sales slump, the iPhone's contribution to Apple's total revenue has also shrunk. Based on the company's data, iPhone sales accounted for close to 46% of Apple's total revenue in Q3 of their 2024 fiscal year.
This represents a 2% drop compared to the same period last year and a significant decline from the 55-60% share of iPhone revenue held between 2017 and 2020. This trend suggests a growing contribution from other Apple products like the iTunes Store and Apple Watch, whose revenue share has risen from 5% in 2017 to almost 30% in Q3 FY 2024.